Jharkhand High Court
M/S. Gtl Infrastructure Limited vs The State Of Jharkhand on 20 August, 2025
Author: Rajesh Shankar
Bench: Rajesh Shankar
2025:JHHC:24537-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (T) No. 5035 of 2024
M/S. GTL INFRASTRUCTURE LIMITED, A Company within the
meaning of section 2 (20) of the Companies Act, 2013, having its
registered office at 3rd Floor, H/O Pradip Kumar Jain, Kutchery Road,
Ranchi, through its authorized representative, Dharam Nath Jha, son
of Late Mahendra Jha, aged about 54 years, resident of Village
Bishanpur, P.O. & P.S- Phulpras, Town & District- Madhubani, Bihar
... ... ... ... ... Petitioner
Versus
1. The State of Jharkhand
2. COMMISSIONER, STATE GOODS & SERVICES TAX,
JHARKHAND, having its office at Utpad Bhawan, 1st Floor,
Opposite C.M. House, Kanke Road, P.O. & P.S.- Gonda, Town &
District- Ranchi-834008 (Jharkhand).
3. ADDITIONAL COMMISSIONER (Admin), STATE GOODS &
SERVICES TAX, JHARKHAND, Commercial Tax Department,
Court Compound, Behind Jaipal Singh Stadium, Kutchery Road,
P.O. -G.P.O., P.S-Kotwali, Ranchi-834001 (Jharkhand).
4. STATE TAX OFFICER, Ranchi West Circle, Commercial Tax
Department, Court Compound. Behind Jaipal Singh Stadium,
Kutchery Road, P.O.- GPO, P.S. Kotwali, Ranchi-834001
(Jharkhand) ... ... ... ... Respondents
---------
CORAM: HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJESH SHANKAR
---------
For the Petitioner : Mr. Nitin Kumar Pasari, Advocate
For the Respondents: Mr. Ashok Kumar Yadav, Sr. SC 1
———
05/Dated: 20.08.2025
1. The instant petition has been filed for grant of following reliefs:
(a) For issuance of an appropriate writ, order or direction,
directing upon the Respondents to show cause as to why the
refund application of the Petitioner has not been processed
which pertains to refund of the pre-deposited amount with
the government exchequer in order to maintain the appeal
under Section 107 of the Act.
(b) Consequent upon showing cause, if any, and on being
satisfied that the Respondents were obligated to grant
refund of the pre-deposit amount and the refund applicationPage 1 of 9
2025:JHHC:24537-DBof the Petitioner could not have been automatically rejected
on the ground of being time barred, the Respondents be
directed to refund the amount of pre-deposit forthwith along
with statutory interest.
(c) For issuance of an appropriate writ, order or direction,
holding and declaring that once the appeal preferred by the
assessee is allowed, withholding of the pre-deposit amount
without any reasonable cause would be hit by Article 265 of
the Constitution of India, which mandates that no tax shall be
levied or collected except by authority of law.
(d) For issuance of an appropriate writ, order or direction,
quashing and setting aside the deficiency memos issued in
Form GST RFD-03 dated 07.06.2024 (Annexure-6) and
02.08.2024 (Annexure-8) being wholly illegal and arbitrary.
2. The application for refund of pre-deposit amount has been
rejected through an automated order dated 07.06.2024 on the ground
of limitation as prescribed under section 54 of the CGST/Jharkhand
GST Act.
3. The moot question is whether the said provision is mandatory.
The question is no longer res-integra as regards this Court and has
been authoritatively decided by the Division Bench of this Court in
W.P.(T) No. 6527 of 2024, the case title M/s.BLA Infrastructure
Private Limited v. The State of Jharkhand and others, which shall
have to be reproduced:
“9.For better appreciation, Section 54 of the Act is hereto quoted for
ease:
Section 54. Refund of tax.-
(1)Any person claiming refund of any tax and interest, if any,
paid on such tax or any other amount paid by him, may
make an application before the expiry of two years from the
relevant date in such form and manner as may be
prescribed:
Provided that a registered person, claiming refund of any
balance in the electronic cash ledger in accordance with the
provisions of sub-section (6) of section 49, may claim such
refund in 1[such form and] manner as may be prescribed.
(2) A specialised agency of the United Nations Organisation
or any Multilateral Financial Institution and Organisation
notified under the United Nations (Privileges and Immunities)
Act, 1947 (46 of 1947), Consulate or Embassy of foreign
countries or any other person or class of persons, as notified
under section 55, entitled to a refund of tax paid by it on
inward supplies of goods or services or both, may make anPage 2 of 9
2025:JHHC:24537-DBapplication for such refund, in such form and manner as may
be prescribed, before the expiry of 1[two years] from the last
day of the quarter in which such supply was received.
(3) Subject to the provisions of sub-section (10), a
registered person may claim refund of any unutilised input
tax credit at the end of any tax period:
Provided that no refund of unutilised input tax credit shall be
allowed in cases other than-
(i)zero rated supplies made without payment of tax;
(ii) where the credit has accumulated on account of rate of
tax on inputs being higher than the rate of tax on output
supplies (other than nil rated or fully exempt supplies),
except supplies of goods or services or both as may be
notified by the Government on the recommendations of the
Council:
9 [****]
Provided also that no refund of input tax credit shall be
allowed, if the supplier of goods or services or both avails of
drawback in respect of central tax or claims refund of the
integrated tax paid on such supplies.
(4) The application shall be accompanied by-
(a) such documentary evidence as may be prescribed to
establish that a refund is due to the applicant; and
(b) such documentary or other evidence (including the
documents referred to in section 33) as the applicant may
furnish to establish that the amount of tax and interest, if
any, paid on such tax or any other amount paid in relation to
which such refund is claimed was collected from, or paid by,
him and the incidence of such tax and interest had not been
passed on to any other person:
Provided that where the amount claimed as refund is less
than two lakh rupees, it shall not be necessary for the
applicant to furnish any documentary and other evidences
but he may file a declaration, based on the documentary or
other evidences available with him, certifying that the
incidence of such tax and interest had not been passed on to
any other person.
(5) If, on receipt of any such application, the proper officer is
satisfied that the whole or part of the amount claimed as
refund is refundable, he may make an order accordingly and
the amount so determined shall be credited to the Fund
referred to in section 57.
(6) Notwithstanding anything contained in sub-section (5),
the proper officer may, in the case of any claim for refund on
account of zero-rated supply of goods or services or both
made by registered persons, other than such category of
registered persons as may be notified by the Government on
the recommendations of the Council, refund on a provisional
basis, ninety per cent. of the total amount so claimed, 8[****],
in such manner and subject to such conditions, limitations
and safeguards as may be prescribed and thereafter make
an order under sub-section (5) for final settlement of the
refund claim after due verification of documents furnished by
the applicant.
(7) The proper officer shall issue the order under sub-section
(5) within sixty days from the date of receipt of application
complete in all respects.
(8) Notwithstanding anything contained in sub-section (5),
the refundable amount shall, instead of being credited to the
Fund, be paid to the applicant, if such amount is relatable to-
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(a) refund of tax paid on 2[export] of goods or services or
both or on inputs or input services used in making such
1[exports];
(b) refund of unutilised input tax credit under sub-section (3);
(c) refund of tax paid on a supply which is not provided,
either wholly or partially, and for which invoice has not been
issued, or where a refund voucher has been issued;
(d) refund of tax in pursuance of section 77;
(e) the tax and interest, if any, or any other amount paid by
the applicant, if he had not passed on the incidence of such
tax and interest to any other person; or
(f) the tax or interest borne by such other class of applicants
as the Government may, on the recommendations of the
Council, by notification, specify.
3[(8A) The Government may disburse the refund of the State
tax in such manner as may be prescribed.]
(9) Notwithstanding anything to the contrary contained in any
judgment, decree, order or direction of the Appellate Tribunal
or any court or in any other provisions of this Act or the rules
made thereunder or in any other law for the time being in
force, no refund shall be made except in accordance with the
provisions of sub-section (8).
(10) Where any refund is due 4[***] to a registered person
who has defaulted in furnishing any return or who is required
to pay any tax, interest or penalty, which has not been
stayed by any court, Tribunal or Appellate Authority by the
specified date, the proper officer may-
(a) withhold payment of refund due until the said person has
furnished the return or paid the tax, interest or penalty, as
the case may be;
(b) deduct from the refund due, any tax, interest, penalty, fee
or any other amount which the taxable person is liable to pay
but which remains unpaid under this Act or under the
existing law .
Explanation.-For the purposes of this sub-section, the
expression “specified date” shall mean the last date for filing
an appeal under this Act.
(11) Where an order giving rise to a refund is the subject
matter of an appeal or further proceedings or where any
other proceedings under this Act is pending and the
Commissioner is of the opinion that grant of such refund is
likely to adversely affect the revenue in the said appeal or
other proceedings on account of malfeasance or fraud
committed, he may, after giving the taxable person an
opportunity of being heard, withhold the refund till such time
as he may determine.
(12) Where a refund is withheld under sub-section (11), the
taxable person shall, notwithstanding anything contained in
section 56, be entitled to interest at such rate not exceeding
six per cent. as may be notified on the recommendations of
the Council, if as a result of the appeal or further
proceedings he becomes entitled to refund.
(13) Notwithstanding anything to the contrary contained in
this section, the amount of advance tax deposited by a
casual taxable person or a non-resident taxable person
under sub section (2) of section 27, shall not be refunded
unless such person has, in respect of the entire period for
which the certificate of registration granted to him had
remained in force, furnished all the returns required under
section 39.
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(14) Notwithstanding anything contained in this section, no
refund under subsection (5) or sub-section (6) shall be paid
to an applicant, if the amount is less than one thousand
rupees.
10[(15) Notwithstanding anything contained in this section,
no refund of unutilised input tax credit on account of zero
rated supply of goods or of integrated tax paid on account of
zero rated supply of goods shall be allowed where such zero
rated supply of goods is subjected to export duty.]
Explanation.- For the purposes of this section,-
(1)”refund” includes refund of tax paid on zero-rated supplies
of goods or services or both or on inputs or input services
used in making such zero-rated supplies, or refund of tax on
the supply of goods regarded as deemed exports, or refund
of unutilised input tax credit as provided under sub-section
(3).
(2) “relevant date” means-
(a) in the case of goods exported out of India where a refund
of tax paid is available in respect of goods themselves or, as
the case may be, the inputs or input services used in such
goods,-
(i) if the goods are exported by sea or air, the date on which
the ship or the aircraft in which such goods are loaded,
leaves India; or
(ii) if the goods are exported by land, the date on which such
goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of
goods by the Post Office concerned to a place outside India;
(b) in the case of supply of goods regarded as deemed
exports where a refund of tax paid is available in respect of
the goods, the date on which the return relating to such
deemed exports is furnished;
[(ba) in case of zero-rated supply of goods or services or
both to a Special Economic Zone developer or a Special
Economic Zone unit where a refund of tax paid is available in
respect of such supplies themselves, or as the case may be,
the inputs or input services used in such supplies, the due
date for furnishing of return under section 39 in respect of
such supplies;]
(c) in the case of services exported out of India where a
refund of tax paid is available in respect of services
themselves or, as the case may be, the inputs or input
services used in such services, the date of-
(i) receipt of payment in convertible foreign exchange [or in
Indian rupees wherever permitted by the Reserve Bank of
India] , where the supply of services had been completed
prior to the receipt of such payment; or
(ii) issue of invoice, where payment for the services had
been received in advance prior to the date of issue of the
invoice;
(d) in case where the tax becomes refundable as a
consequence of judgment, decree, order or direction of the
Appellate Authority, Appellate Tribunal or any court, the date
of communication of such judgment, decree, order or
direction;
(e) [in the case of refund of unutilised input tax credit under
clause (ii) of the first proviso to sub-section (3), the due date
for furnishing of return under section 39 for the period in
which such claim for refund arises;]
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(f) in the case where tax is paid provisionally under this Act
or the rules made thereunder, the date of adjustment of tax
after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date
of receipt of goods or services or both by such person; and
(h) in any other case, the date of payment of tax.
17. There is no dispute to the effect that once refund is by way of
statutory exercise, the same cannot be retained neither by the
State, nor by the Centre, that too by taking inasmuch as, the
language couched in Section 54 is “may make an application before
the expiry of 2 years from the relevant date”.
The word ” relevant date” has been defined in Explanation 2
of Section 54, which thus reads as follows:
(2)”relevant date” means-
(a) in the case of goods exported out of India where a refund
of tax paid is available in respect of goods themselves or, as
the case may be, the inputs or input services used in such
goods,-
(i) if the goods are exported by sea or air, the date on which
the ship or the aircraft in which such goods are loaded,
leaves India; or
(ii) if the goods are exported by land, the date on which such
goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of
goods by the Post Office concerned to a place outside India,
(b) in the case of supply of goods regarded as deemed
exports where a refund of tax paid is available in respect of
the goods, the date on which the return relating to such
deemed exports is furnished;
[(ba) in case of zero-rated supply of goods or services or
both to a Special Economic Zone developer or a Special
Economic Zone unit where a refund of tax paid is available in
respect of such supplies themselves, or as the case may be,
the inputs or input services used in such supplies, the due
date for furnishing of return under section 39 in respect of
such supplies;]
(c) in the case of services exported out of India where a
refund of tax paid is available in respect of services
themselves or, as the case may be, the inputs or input
services used in such services, the date of-
(i) receipt of payment in convertible foreign exchange for in
Indian rupees wherever permitted by the Reserve Bank of
India , where the supply of services had been completed
prior to the receipt of such payment; or
(ii) issue of invoice, where payment for the services had
been received in advance prior to the date of issue of the
invoice;
(d) in case where the tax becomes refundable as a
consequence of judgment, decree, order or direction of the
Appellate Authority, Appellate Tribunal or any court, the date
of communication of such judgment, decree, order or
direction;
(e) 7[in the case of refund of urutilised input tax credit under
clause (ii) of the first proviso to sub-section (3), the due date
for furnishing of return under section 39 for the period in
which such claim for refund arises;]
(f) in the case where tax is paid provisionally under this Act
or the rules made thereunder, the date of adjustment of tax
after the final assessment thereof;
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(g) in the case of a person, other than the supplier, the date
of receipt of goods or services or both by such person; and
(h) in any other case, the date of payment of tax.
What is relevant in the aforesaid Explanation is Explanation
2(d) and it is this explanation which probably is haunting the
minds of the Officer of the State.
18. The word ‘may’ has been interpreted by the Hon’ble Apex Court
in numerous cases and the Hon’ble Apex Court has opined that the
word ‘may’ as would appear in different statutes, is normally
directory in nature and not mandatory.
19. Recently, the Hon’ble Apex Court in the matter of Muskan
Enterprises & Anr. vs. State of Punjab & Anr. reported in 2024
SCC Online SC 4107 has interpreted the word „may‟ and while
dealing with the statute the Negotiable Instrument Act, 1881, has
been inter alia pleased to hold as under:
24. Law is well-settled that user of the verbs ‘may’ and ‘shall’
in a statute is not a sure index for determining whether such
statute is mandatory or directory in character. The legislative
intent has to be gathered looking into other provisions of the
enactment, which can throw light to guide one towards a
proper determination. Although the legislature is often found
to use ‘may’, ‘shall’ or ‘must’ interchangeably, ordinarily
‘may’, having an element of discretion, is directory whereas
‘shall’ and ‘must’ are used in the sense of a mandatory
provision. Also, while the general impression is that ‘may’
and ‘shall’ are intended to have their natural meaning, it is
the duty of the court to gather the real intention of the
legislature by carefully analysing the entire statute, the
section and the phrase/expression under consideration. A
provision appearing to be directory in form could be
mandatory in substance. The substance, rather than the
form, being relevant, ultimately it is a matter of construction
of the statute in question that is decisive.
25. It is also a well-accepted rule that interpretation must
depend on the text and the context the text representing the
texture and the context giving it colour and, that
interpretation would be best, which makes the textual
interpretation match the contextual. While wearing the
glasses of the statute-maker, the enactment has to be
looked at as a whole and it needs to be discovered what
each section, each clause, each phrase and each word
means and whether it is designed to fit into the scheme of
the entire enactment. While no part of a statute and no word
of a statute can be construed in isolation, statutes have to be
construed so that every word has a place and everything is
in its place. We draw inspiration for the above understanding
of the manner of interpreting a statute from the decision of
this Court in Reserve Bank of India v. Peerless General
Finance & Investment Co. Ltd.
20. The Hon’ble Apex Court in the matter of Rakesh Ranjan
Shrivastava Vs. State of Jharkhand & Anr. reported in (2024) 4
SCC 419 has pleased to deal with the word ‘may’ and has been
inter alia pleased to hold as under:
11. There is no doubt that the word “may” ordinarily does not
mean “must”. Ordinarily, “may” will not be construed as
“shall”. But this is not an inflexible rule. The use of the word
“may” in certain legislations can be construed as “shall”, and
the word “shall” can be construed as “may”. It all depends on
the nature of the power conferred by the relevant provision
of the statute and the effect of the exercise of the power. ThePage 7 of 9
2025:JHHC:24537-DBlegislative intent also plays a role in the interpretation of such
provisions. Even the context in which the word “may” has
been used is also relevant.
18. In the case of Section 143-A, the power can be
exercised even before the accused is held guilty. Sub-
section (1) of Section 143-A provides for passing a drastic
order for payment of interim compensation against the
accused in a complaint under Section 138, even before any
adjudication is made on the guilt of the accused. The power
can be exercised at the threshold even before the evidence
is recorded. If the word “may” is interpreted as “shall”, it will
have drastic consequences as in every complaint under
Section 138, the accused will have to pay interim
compensation up to 20% of the cheque amount. Such an
interpretation will be unjust and contrary to the well-settled
concept of fairness and justice. If such an interpretation is
made, the provision may expose itself to the vice of manifest
arbitrariness. The provision can be held to be violative of
Article 14 of the Constitution. In a sense, sub-section (1) of
Section 143-A provides for penalising an accused even
before his guilt is established.
19. Considering the drastic consequences of exercising the
power under Section 143-A and that also before the finding
of the guilt is recorded in the trial, the word “may” used in the
provision cannot be construed as “shall”. The provision will
have to be held as directory and not mandatory. Hence, we
have no manner of doubt that the word “may” used in
Section 143-A, cannot be construed or interpreted as “shall”.
Therefore, the power under sub-section (1) of Section 143-A
is discretionary.
20. Even sub-section (1) of Section 148 uses the word
“may”. In Surinder Singh Deswal v. Virender Gandhi
(Surinder Singh Deswal v. Virender Gandhi, (2019) 11 SCC
341: (2019) 3 SCC (Civ) 765: (2019), 3 SCC (Cri) 461], this
Court, after considering the provisions of Section 148, held
that the word “may” used therein will have to be generally
construed as “rule” or “shall”. It was further observed that
when the appellate court decides not to direct the deposit by
the accused, it must record the reasons. After considering
the said decision in Surinder Singh Deswal (Surinder Singh
Deswal v. Virender Gandhi, (2019) 11 SCC 341: (2019) 3
SCC (Civ) 765 : (2019) 3 SCC (Cri) 461), this Court in
Jamboo Bhandari v. M.P. SIDC Ltd. [Jamboo Bhandari v.
M.P. SIDC Ltd., (2023) 10 SCC 446: (2024) 1 SCC (Cri) 90:
(2024) 1 SCC (Civ) 547)], in para 6, held thus: (SCC p. 449)
“6. What is held by this Court is that a purposive
interpretation should be made of Section 148 NI Act.
Hence, normally, the appellate court will be justified
in imposing the condition of deposit as provided in
Section 148. However, in a case where the appellate
court is satisfied that the condition of deposit of 20%
will be unjust or imposing such a condition will
amount to deprivation of the right of appeal of the
appellant, exception can be made for the reasons
specifically recorded.”
(emphasis supplied)
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21. In terms of the interpretation extended by the Hon‟ble Apex
Court, as also, taking into consideration that the refund of statutory
pre-deposit is a right vested on an assessee after an appeal is
allowed in its favour, we have no reason to say that the pre-deposit
made by an assessee cannot be forefeited taking aid of section 54
of the Act and the same cannot be the intent of the Act of 2017.”
4. The learned counsel for the State would, however, contend that
a contrary view has been taken by the Delhi High court. We need only
to state that the view taken by the Division Bench of this Court is
binding on this Bench and as regards the view taken by the Delhi High
Court, in Sethi Sons (India) v. Assistant Commissioner and
Others reported in 2023 SCC OnLine Del 8351, the same has only a
persuasive value . Even otherwise, we are clearly of the view that the
action of the State in retaining the amount of the petitioner would
amount to undue enrichment of the State, which otherwise, is
impermissible.
5. In view of the aforesaid discussions and for the reasons stated
above, we have no option but to allow this petition by directing the
respondents to refund the pre-deposit amount to the petitioner. The
amount be refunded to the petitioner within a period of four weeks
from today, failing which the respondents shall be liable to pay interest
@ 6% per annum from the date it was due till the date of actual
payment.
(Tarlok Singh Chauhan, C.J.)
NAFR (Rajesh Shankar, J.)
Sharda/MM/
Cp.02
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